2020 (10) TMI 14 - Tri - Insolvency and Bankruptcy

Tribunal admits insolvency application under Section 9, appoints Resolution Professional

AF Consult India Pvt. Ltd. Versus Sikkim Hydro Venture Limited

The Tribunal admitted the application under Section 9 of the Insolvency and Bankruptcy Code, 2016, finding a default in payment by the Corporate Debtor ... Maintainability of application - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - existence of debt and dispute or not - HELD THAT:- It is clearly established that the default in payment of the Operational debt has occurred by the corporate debtor further there also exist a pre-existing dispute with regards the payments of invoices on grounds of substandard quality of service and improper execution of the terms of the agreement. In the given facts and circumstances, the present application is complete and the Applicant has established its claim which is payable and due by the corporate debtor. In the light of above facts and records, the present application is admitted, in terms of section 9(5) of IBC, 2016. The Applicant has filed an affidavit under section 9(3)(b) dated 16.11.2018 affirming that no notice of dispute has been given by the Corporate debtor relating to dispute of the unpaid operational debt - The registered office of corporate debtor is situated in Delhi and therefore this Tribunal has jurisdiction to entertain and try this application - The default occurred from 16.01.2018, hence the debt is not time barred and the application is filed within the period of limitation. Application admitted - moratorium declared. Issues:1. Application filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 for initiating Corporate Insolvency process.2. Dispute regarding non-payment of operational debt by the Corporate Debtor.3. Establishment of default in payment by the Corporate Debtor.4. Existence of pre-existing dispute between the parties.5. Appointment of Interim Resolution Professional.6. Direction to deposit a sum with the Interim Resolution Professional.7. Imposition of moratorium on the Corporate Debtor.Analysis:1. The application was filed under Section 9 of the Insolvency and Bankruptcy Code, 2016 by AF Consult India Pvt. Ltd. against Sikkim Hydro Power Ventures Limited for non-payment of operational debt. The Applicant, a consultancy services provider, had invoiced the Corporate Debtor for services rendered, which remained partially unpaid, leading to the initiation of the insolvency process.2. The Corporate Debtor claimed a pre-existing dispute regarding the quality of services provided by the Applicant. However, the Tribunal found that the Corporate Debtor did not dispute the operational debt due and payable, which was more than one lakh rupees. The Tribunal referred to the broad definition of default under the Code and admitted the application based on the established default in payment.3. The Tribunal examined the documents and submissions from both parties and concluded that the default in payment had indeed occurred. Despite the Corporate Debtor raising concerns about the quality of services, the Tribunal noted that the debt was not disputed, and the application was complete, leading to its admission under Section 9(5) of the IBC, 2016.4. Regarding the appointment of an Interim Resolution Professional, Mr. Diwan Chand Arya was appointed by the Tribunal, subject to certain conditions. The Tribunal directed the Operational Creditor to deposit a sum with the Interim Resolution Professional to cover expenses related to the insolvency resolution process.5. The Tribunal imposed a moratorium on the Corporate Debtor as per Section 14(1) of the Code, prohibiting certain actions during this period. The terms of Sections 14(2) to 14(4) were also invoked, ensuring the proper administration of the insolvency resolution process. The Registry was instructed to communicate the order to all relevant parties and authorities for compliance.This detailed analysis of the judgment highlights the key issues addressed by the Tribunal and the legal implications of the decision in the context of the Insolvency and Bankruptcy proceedings.